The law goes further to require secondhand dealers to turn over a valuable business asset, namely, their business’ proprietary client information. For every transaction a secondhand dealer must obtain the seller’s personal information such as their name, address, driver’s license number and the license plate number of the vehicle in which the goods were delivered. They must also make a detailed description of the item(s) purchased and submit this with the personal identification information of every transaction to the local policing authorities through electronic daily reports. If a seller cannot or refuses to produce to the secondhand dealer any of the required forms of identification, the secondhand dealer is prohibited from completing the transaction.

This legislation amounts to a public taking of private property without compensation. Regardless of whether or not the transaction information is connected with, or law enforcement is investigating a crime, individuals and businesses are forced to report routine business activity to the police. Can law enforcement not accomplish its goal of identifying potential thieves and locating stolen items in a far less intrusive manner? And of course, there are already laws that prohibit stealing, buying or selling stolen goods, laws that require businesses to account for transactions and laws that penalize individuals and businesses that transact in stolen property. Why does the Louisiana State Legislature need to enact more laws infringing on personal privacy, liberties and freedom?

The standard justification for a law such as this is easy to understand. Second hand stores and pawnbrokers if only because both have long been a source for people in possession of stolen good to fence their ill-gotten wares. However, the law itself actually exempts pawnbrokers from the no-cash part of the law even though it’s fairly clearly that pawn shops are notorious as the destination for stolen goods. If the law was really aimed at preventing stolen goods from being sold in this manner, why ban pawnbrokers? Even if you accepted the justifications on their face, though, his law goes way too far, especially in the banning of cash transactions. The purpose of the bill could be met simply be requiring some form of Identification be taken when a transaction is made, and that records of the same be maintained. Banning the use of legal tender completely is way over the top.

Additionally, while I haven’t researched the issue, I’m not even sure that the state has the authority to say that Federal Reserve Notes, which Congress has made legal tender for all transactions, cannot be used in a transaction. I would think that there’s a case to be made here that Louisiana has violated the Supremacy Clause of the Constitutional by saying that U.S. currency cannot be used for a certain class of transactions. Certainly, if this is allowed to stand, then the effect would be that any state could say that cash cannot be used for any number of transaction in the name of “fighting crime,” “public safety,” or whatever other excuse an inventive legislator can come up with.

It’s easy to understand why Louisiana would want to ban cash transactions. Absent some other form of record keeping, cash brings a kind of anonymity that paying with credit cards, debit cards, or checks cannot offer. If I’ve got a hundred bucks in my wallet, I can spend it anywhere I want without any concern that someone, somewhere is tracking me. You can’t say the same thing with any other form of payment. There’s something to be said for the ability to conduct your business without worrying about whether or not what you buy and where you buy is being monitored, either by a private entity or the government. In Louisiana, though, you can’t do that anymore, at least not if you want to buy used goods.

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About Doug MataconisDoug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway.
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Additionally, while I haven’t researched the issue, I’m not even sure that the state has the authority to say that Federal Reserve Notes, which Congress has made legal tender for all transactions, cannot be used in a transaction.

I assume the issue is the metal scavengers. Outside the beltway, people are pulling metal out of old buildings and removing manhole covers and taking them to the metal recyclers. In the process, they are starting fires, getting electrocuted, and releasing hazardous chemicals. I believe in Indiana or Indianapolis, recyclers are now required to videotape the transactions or take pictures.

Here in California, thieves are stealing copper wiring and piping from buildings, along with ANYTHING made of metal that is accessible.

I think asking for driver’s licences and/or another form of ID for these types of transactions might not be a bad idea, but you can’t make US Notes illegal. That seems like a clear constitutional violation.

Definitely a faux pas by the legislature and by Gov. Jindal. Apparently they forgot that the road to hell is paved with the very best of intentions.

I don’t think this law will survive too long. The dormant commerce clause alone provides a good reason to abrogate it. Probably there are other legal maladies with it too. The federal courts in Louisiana and especially the 5th Circuit U.S. Court of Appeals are quite amenable to striking down anti-commerce laws.

The version of the bill I read–it may have been only a draft–specifically exempted charitable organizations like Good Will. I imagine it’s because Good Will is not the place to go when you’re trying to get rid of a thousand pounds of copper wiring or tubing.

Still, better record keeping on the part of the purchaser would accomplish the same end as this bill, without the constitutional issues.

There are no good intentions here. This is solely to set up monitoring on all transactions, and to ensure that people are chilled from buying used goods in favour of new ones. This is a direct attack on personal privacy, with the added benefit that it takes out the first sale doctrine as well.

Additionally, while I haven’t researched the issue, I’m not even sure that the state has the authority to say that Federal Reserve Notes, which Congress has made legal tender for all transactions, cannot be used in a transaction.

This is, in fact the core of what it means to be a Sovereign State and autonomous issuer of currency. Louisiana went way beyond unconstitutional with this one; while I don’t doubt that no one involved was thinking in such grandiose terms, this is effectively an attack on the foundation of our economy. No way it stands.

@michael reynolds: Glass, schmlass. The demise of CA has been long predicted but stubbornly refuses to arrive. California isn’t going anywhere. There is so much entrenched wealth out here it’s just plain ridiculous. As has been stated many times in many ways the endless husband/wife bickering over money shifts in our favor when we restore sanity to the tax code, and quit trying to maintain and build what we have on a fraction of the needed investments.

The hot desert sun that is hot even in January certainly isn’t going anywhere. Neither is Los Angeles. No one quake can now take it out. You’d need a swarm.

So let ’em toss all the rocks they want. It’s a huge state and they will quickly get lost in all the other rocks of our mostly desert.

You’re preaching to the choir. I’m looking out at the lights of San Francisco, yesterday was up in wine country, a few months ago was living in the OC, and now closing in hopefully on some Hollywood action and let me make this crystal clear: No other state is half as cool as California. And I’ve lived 11 other states and the DC, and visited every state except North Dakota.

Pawnshops are exempted because they already are required by law to record details of the transactions. The elimination of cash, however, doesn’t pass the smell test. Every $10 payment converted from cash to credit card is 25 cents in some major bank’s till. I wonder how much passed hands for this windfall.

@PD Shaw:
WHAT A CROCK OF SHT!
HOW ABOUT THE POLICE DOING THIER JOB?
AND WHY ARE PEOPLE FORCED TO STEAL METAL?
BECAUSE THEY ARE POOR AND THE RICH ELITE ARE JUST
TURNING THE SCREWS TIGHTER.
ITS THE SAMNE DAMN LOGIC THAT
FUELS THE PHONEY ‘WAR ON…….TERROR/DRUGS/ETC”
ITS ALL AN ATTACK ON THE WORKING CLASSES

I use my debit card to get cash out of the ATM at $200 dollars at a time and pay cash for everything. I don’t have anything to hide except for the fact a may buy too much wine. I simply object to the fact that when I use my debit card someone is keeping track of what I buy. Perhaps that makes me a progressive libertarian. There are times I have to use a credit card – I use AMEX which I have to pay off every month and I don’t use it unless there is no alternative.

@michael reynolds: REALLY! We are a little backwards at times but anyways,,,,This is already being fought! Exempting pawnbrokers is the real joke!
I would get our of California before we sell it to China.!
Just voted against most of the useful idiots that voted for this crap today. Maybe mine will count!

@ponce: Pawnbrokers are EXEMPT because they are covered under different laws that already require them to have documentation. However, side effect is they can still deal in cash, where an antique dealer or garage sale can not.

Wow I thought I was reading an article from the Onion. This is for real? I can see that there is probably more reasons than dealing in stolen copper, like tracking income for IRS purposes. To create a digital cash society, would keep business owners from pocketing cash and thus not reporting it. Yikes jump in the swamp, the house is on fire.

I got rid of my debit card two years ago….i buy with cash only. The bank has no idea where I spend my money, and that’s just how I like it. I pay no ATM fees. I don’t worry about someone stealing my identity as they look over my shoulder. If everyone did that, the banks would be suffering the loss of $$$$$$ all those ATM fees which count for probably millions per year. Give them back their damn debit cards and pay cash….you’ll be glad you did.

@Kelly: Garage sales have nothing to do with this law. Only applies to buyers and resellers of used goods and materials. So everyone can still use cash to buy secondhand goods anywhere from anyone.
But . . . it is still a small business killing law and the beginnings of police state.